On January 1, 2019, Earthcom had the following account balances in its sharehold
ID: 2342695 • Letter: O
Question
On January 1, 2019, Earthcom had the following account balances in its shareholders' equity accounts. Common stock, $1 par, 250,000 shares issued 250,000 Paid-in capital—excess of par, common 500,000 Paid-in capital—excess of par, preferred 100,000 Preferred stock, $100 par, 10,000 shares outstanding 1,000,000 Retained earnings 2,000,000 Treasury stock, at cost, 5,000 shares 25,000 During 2019, Earthcom Inc. had several transactions relating to common stock. April 10: A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The market value of the stock was $4 on this date. July 18: Declared and distributed a 3% stock dividend on outstanding common stock. The market value is $5 per share. December 1: Declared a 50 cents per share cash dividend on the outstanding common shares. December 20: Paid the cash dividend. Below, and/or on the following page, without preparing journal entries, prepare the shareholders' equity section of Earthcom's balance sheet in good form as of December 31, 2019. Assume net income is $500,000 for 2019.
Explanation / Answer
Earthcom Balance Sheet ( Partial ) December 31, 2019 Stockholders' Equity $ Common Stock ( $ 0.50 par, 490,000 shares issued and outstanding ) 252,350 Paid-in Capital in Excess of Par : Common 566,150 Preferred Stock 1,000,000 Paid-in Capital in Excess of Par : Preferred Stock 100,000 Total Contributed Capital 1,918,500 Retained Earnings 2,174,150 Treasury Stock ( At cost ) ( 25,000 ) Total Stockholders Equity $ 4,067,650